- According to reports, the Bank of England has resolved to develop the Digital Pound.
- The apex bank will work with the country’s finance ministry to develop a strategy.
- There are plans to experiment with the project for two years.
- Authorities worldwide admit digital currencies might replace fiat currency in the future.
As per emerging reports, the Bank of England has resolved to commence work on developing the Digital Pound for future usage. The apex bank, as reported, will work with the country’s finance ministry to develop a plan to ensure the acceleration of digital currency.
According to the finance minister, Jeremy Hunt, the Digital Pound will come to fruition before the second half of this decade, thereby aiding payments for goods and services.
"While cash is here to stay, a digital Pound issued and backed by the Bank of England could be a new way to pay that’s trusted, accessible, and easy to use,” Hunt noted.
The Bank of England wants to make the Digital Pound accessible through digital wallets, just like cryptocurrencies. However, as revealed, the private sector will offer wallets through smart cards or smartphones. The apex bank aims to make the currency run for both on and offline payments without any interest paid on holdings.
It plans to carry out its experimentation and design of the project for two years. The central bank is not planning to start a pilot test for the Digital Pound until at least 2025. The outcome of this experiment will determine its resolve to continue or discard the project.
Countries Seeking to Adopt Digital Currencies
Countries across the globe are now working to develop an alternative to cryptocurrencies due to the inherent risks associated with them. Authorities have acknowledged that digital currencies are the future of payment, investment, and value and might replace fiat currency. This initiative led to the creation of Central Bank Digital Currencies (CBDCs).
The Bahamas was the first nation to kickstart and launch its CBDC project in late 2020, identifying it as Sand Dollar. According to reports, the Sand Dollar will offer speed, efficiency, and security to payments. Nigeria has also launched its own CBDC, called e-Naira.
The European Union is not left out of the initiative. Currently, the European Central Bank is working on launching the Digital Euro. According to the President of the ECB, Christine Lagarde, the central bank aims to ensure that citizens and companies have access to the safest form of money in the digital age.
Major countries like India and China are likewise working on their CBDCs.
On the Flipside
- Despite plans to launch the Digital Pound by 2025, the Treasury and Bank of England have hinted that the Digital Pound may not arrive until the next decade.
Why You Should Care
According to Nigel Green, CEO and founder of deVere Group, the UK’s intentions to introduce a Digital Pound show the potential of digital currencies in the future of finance.
More stories on CBDCs:
China’s Digital Yuan Adds Smart Contract Capabilities
ECB Would Put Private Banks in Charge of Users’ Digital Euro Wallets